This letter provides you with information in relation to the proposed supervisory levy for the private health insurance (PHI) industry for 2022-23. The Proposed Financial Institutions Supervisory Levies for 2022-23 discussion paper is expected to be released by Treasury for industry consultation shortly.
During the transition of the PHIs to APRA on 1 July 2015, a four-year costing was agreed with the Department of Finance. For the first four years post-transition to APRA this costing was used to identify the amount of PHI levy to be collected each year. Since the end of this four-year period, APRA has been transitioning to a time-allocation methodology1 to allocate to the PHI industry, consistent with the other APRA-regulated industries. The transitional period was initially two years and had been extended to a third year during 2021-22 as noted in the Proposed Financial Institutions Supervisory Levies for 2021-22 discussion paper2 released by Treasury last year. During the transitional period, a reduction of levies was extended to the PHI industry.
As communicated to industry previously, APRA’s intention is to gradually transition PHIs to levy arrangements consistent with other APRA-regulated industries. As such, 2022-23 will be the first year the PHI industry is fully adopting the APRA time-allocation methodology, bringing the PHI industry in line with all other APRA-regulated industries. The proposed supervisory levy for the PHI industry is $11.8 million for 2022-23. The total compares to $9.9 million in 2021-22 (the full levy amount, prior to transitional adjustments, would have been $12.2 million).
PHIs are an important part of the health system in Australia and APRA remains committed to working with industry to ensure we have a stable efficient competitive financial system.
If you have any questions or concerns in relation to this matter, please do not hesitate to contact APRA or Treasury.
Executive Director, Enterprise Services